finance

| March 14, 2016

1. Perform a Du Pont analysis on BestCare. Assume that the industry average ratios are as follows:

Total margin- 3.8%

Total asset turnover- 2.1

Equity multiplier- 3.2

Return on equity- 25.5%

2. Calculate and interpret the following ratios for BestCare:

Industry Average

Return on assets- 8.0%

Current ratio- 1.3

Days cash on hand- 41 days

Average collection period- 7 days

Debt ratio- 69%

Debt-to-equity ratio- 2.2

Times interest earned ratio- 2.8

Fixed asset turnover ratio- 5.2

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